Both the USDA and the FDA recently released updates to food labeling regulations that will significantly affect food manufacturers. On Friday, May 4, the Agricultural Marketing Service (AMS) of the USDA proposed a rule regarding the National Bioengineered Food Disclosure Standard providing labeling requirements for disclosing whether a food product has been bioengineered.

The proposed rule applies to specific food products: (1) those foods that meet the definition of “food” under the federal Food, Drug, and Cosmetic Act (FDCA); and (2) foods that are subject to Federal Meat Inspection Act, Poultry Products Inspection Act, or the Egg Products Inspection Act, if those foods’ most predominant ingredients would be subject to the FDCA requirements, or its most predominant ingredient is a broth, stock, water, or something similar, and the second-most predominant ingredient is subject to the FDCA. An example would be a chicken pasta soup where chicken broth is the most predominant ingredient, and pasta is the second-most predominant ingredient.

AMS has identified specific products that would be subject to the rule, based on their presence in the United States market. Foods such as field corn and soybeans that are known to be largely bioengineered and have been highly adopted in the United States. will require a bioengineered disclosure, as will products made from those foods, such as corn meal and soy sauce. Other foods, such as sweet corn and summer squash, are not as highly prevalent in bioengineered forms in the United States and thus have different labeling requirements. However they still require some type of bioengineered disclosure.

Under the proposed rule, disclosure requirements would not be triggered by the use of incidental additives that are made from bioengineered organisms, or food derived from animals that consumed bioengineered feed. In addition, the proposed disclosure requirements would not apply to food that the USDA has certified as organic.

AMS has proposed a variety of options in terms of how the products can be labeled, and has provided a few different design options as well. Some examples are below:

These labeling requirements are proposed to go into effect on the same dates as the updated FDA labeling rules. For more information about the proposed rule, see our client advisory here.

Comments on this proposal will be accepted until July 3, 2018. AMS does not intend to extend the comment period beyond this date. AMS must provide a final rule by July 29, 2018.

On the same day, the FDA provided a final rule extending the date for required compliance for the final rules for the Nutrition Facts Label and Serving Size Label. Manufacturers that have more than $10 million in annual food sales have an extension from July 26, 2018 to January 1, 2020, and manufacturers with less than $10 million in annual food sales have an extension from July 26, 2019 to January 1, 2021.

A subcommittee of the House Committee on Science, Space, and Technology held a hearing this week to examine the use of blockchain technology to improve supply chains and combat counterfeiting. If you’re like many people, you may have heard of blockchain technology but you’re still figuring out what it is and how it’s used. There are lots of explanations out there, but here’s one from Forbes magazine that we think is fairly understandable:

“[A] blockchain can be described as an append-only transaction ledger. What that means is that the ledger can be written onto with new information, but the previous information, stored in blocks, cannot be edited, adjusted or changed. This is accomplished by using cryptography to link the contents of the newly added block with each block before it, such that any change to the contents of a previous block in the chain would invalidate the data in all blocks after it.” By being decentralized and available to all participants, it creates accountability and transparency among all parties.

Putting this into a practical example, large food companies are using blockchain technology to track produce grown in Asia, trucked to a processing facility, shipped to the U.S., and stored and distributed throughout the country. Each step is recorded in the blockchain, creating a more transparent and, hopefully, reliable supply chain. Since a supply chain is essentially a series of contracts, legal questions abound about how to sort out the parties, the governing standards, the remedies if the purpose of the contract isn’t achieved, dispute resolution, privacy, etc.

To examine some of these issues, the House Science Committee convened the following logistics and security stakeholders:

Department of Homeland Security is partnering with industry to see if it can set standards for the supply chain process. U.S. Customs and Border Protection, are currently conducting blockchain pilots with industry to see how the technology could be used to combat counterfeit products and intellectual property theft.

UPS and Maersk highlighted blockchain’s ability to verify transactions across distributed ledger could revolutionize the intricacies of the global shipping system, allowing them to trace counterfeit products and provide end-to-end visibility into the supply chain.

Both Maughan and the industry witnesses also called for the continued cooperation of federal and international partners to help craft blockchain standards agreements.

Blockchain could reduce fraudulent goods coming from overseas using American products without licenses in order to undercut domestic businesses.

For anyone interested in the full hearing transcript, it can be found here.

The FDA today released a final version of a November 2017 guidance document that promises a flexible approach to enforcement of agency regulations prescribing calorie declarations at restaurants and similar retail food establishments. The release of the final guidance coincides with the effective date of the regulations. Covered establishments are now expected to comply with the rule, following multiple extensions including one mandated by Congress conditioning enforcement on the agency’s publication of guidance.

As we previously discussed here and here, the rule requires covered food establishments to include three separate disclosures on all menus and menu boards: (1) calorie information for standard menu items and other specified items, (2) the statement that “2,000 calories a day is used for general nutrition advice, but calorie needs vary,” or a substitute statement for children’s menus and menu boards, and (3) a statement that written nutrition information is available upon request. Establishments are only covered if they are part of a chain with 20 or more locations doing business under the same name and offering substantially the same menu items.

FDA Commissioner Scott Gottlieb explained in a statement last week that the guidance was intended to “make it easy for manufacturers and restaurants to provide this information in cost effective ways already found in many chains” and in a manner that “won’t require costly changes to existing infrastructure.” Notable takeaways from the guidance include:

FDA intends to exercise enforcement discretion regarding the “calories from fat” declaration requirement in recognition of “current science support[ing] the view that the type of fat is more relevant with respect to the risk of chronic disease than the overall caloric fat intake.”

Covered establishments have some flexibility in determining how best to display required calorie information. For example, an establishment with a self-service buffet could display calories next to each item, on the sneeze guard over an item, or on a single sign near the buffet. The guidance offers images of displays that FDA considers compliant. Similarly, the guidance explains that an establishment need not create menu boards in addition to paper menus or online menus to meet the requirements, but could add the information to paper menus or use an electronic kiosk to disclose calorie information in lieu of having a menu board.

FDA plans to take a “flexible and not prescriptive” approach to evaluating whether marketing materials constitute a “menu” or “menu board” that would be required to bear calorie information. If the primary purpose of a sign is to entice customers into purchasing a particular item or items, then it would not generally require a calorie declaration. Provided examples of materials that would not require calorie declarations include coupons, posters in store windows, and flyers.

Establishments are only counted towards the threshold number of 20 if they meet each of the following criteria: (1) they do business under the same name; (2) they sell substantially the same menu items; and (3) they sell restaurant-type foods (e., food that is usually eaten on the premises, while walking away, or soon after arriving at another location). For example, if a store had 30 locations operating under the same name but only ten locations sold substantially the same menu items, then the establishments would not be covered under the rule.

The guidance also explains that FDA plans to “work cooperatively with covered establishments to come into compliance with the menu labeling requirements” and “continue with education and outreach, especially in the first year.” Nonetheless, covered establishments should take notice and evaluate whether current labeling practices comply with now effective menu labeling requirements.

FDA Commissioner Scott Gottlieb trumpeted the agency’s “modern and flexible” approach to digital health regulation when speaking at Health Datapalooza last week. As we have written about here, FDA has announced multiple initiatives over the last several months designed to clarify the regulatory considerations around new and emerging digital health technologies. Last week’s speech continued this march, including the following highlights:

Digital Health Innovation Action Plan

Commissioner Gottlieb announced a new policy that streamlines the path for digital health products that contain several functions, some of which are subject to FDA medical device regulation, and some of which are not. The new guidance, available here, attempts to clarify where FDA will and will not be reviewing certain software functions. As expected, the focus of the agency’s review will be on the safety and effectiveness of higher-risk medical device functions that diagnose or treat patients.

Pre Cert 1.0 Coming by End of 2018

Last September, FDA announced its “Pre-Cert” pilot program, which focuses on the company’s program of design, testing, validation, operation, and maintenance rather than the features of a specific product to determine whether a company can be “pre-certified.”

Last week, Commissioner Gottlieb announced an update – the release of a Working Model of the program. It is designed to be a first of several iterations, each informed by input from developers, patients, providers, and the public. Commissioner Gottlieb said that FDA is committed to launching “Pre Cert 1.0” by the end of 2018, with further refinements in 2019.

Commissioner Gottlieb described AI as “one of the most promising digital health tools” and advocated employing the Pre-Cert approach to allow companies to make minor changes to their devices without having to make new submissions each time. Given this potential, Gottlieb announced that FDA is “actively developing a new regulatory framework to promote innovation in this space and support the use of AI-based technologies.” He stressed that the regulatory structure must be sufficiently flexible to keep pace with the field.

Consistent with the use of AI and machine learning to inform healthcare diagnoses and decisions, Commissioner Gottlieb announced the creation of an internal data science incubator called the Information Exchange and Data Transformation (INFORMED). The initial focus of the incubator will be, among other things, “the conduct of regulatory science research in areas related to health technology and advanced analytics related to cancer.” The project will also involve collaborations with Project Data Sphere, the National Cancer Institute, and Harvard University.

Drug Development and Safety Reporting Announcements

Commissioner Gottlieb announced two initiatives relating to drug development and safety.

First, in light of the multiple use cases for digital health and prescription drugs, new guidance will be released to address the role of digital health in drug development. Specifics on timing were not mentioned.

Second, a new Premarket Digital Safety Program is underway to enable a unified data standard for meeting electronic reporting requirements under the expedited safety reporting regulations of an Investigational New Drug Application. The new digital submission process is intended to eventually replace the paper-based system which Commissioner Gottlieb characterized as a “fragmented analog workflow.”

We will continue to follow FDA’s evolution in the regulation of digital health and keep you updated here.

On this auspicious April 20th, three developments in the world of cannabis regulation caught our attention. The first is the unanimous recommendation by a panel of outside advisers to FDA in favor of approving Epidiolex, an epilepsy drug manufactured by GW Pharmaceuticals. The active ingredient in Epidiolex is cannabidiol (CBD), which is a chemical found in cannabis that is not considered psychoactive. If approved, Epidiolex would have orphan drug status, meaning that it is marketed to treat rare diseases or conditions, in this instance rare forms of epilepsy. FDA is not bound by the advisory committee recommendations, but often follows them.

With Epidiolex’s approval likely looming, one question is what the impact will be on the CBD dietary supplements currently on the market. FDA has made clear that it does not believe that CBD can be legally marketed as a dietary supplement because of GW Pharmaceuticals’ initiation of investigational new drug applications for its products prior to CBD being marketed as a supplement. Further, FDA has issued numerous warning letters relative to CBD labeled as dietary supplements but that contain little or no actual CBD as well as those that feature express disease treatment claims. Will the approval of Epidiolex impact those CBD products currently sold as supplements? Continue Reading

As the gravitational pull toward marijuana legalization continues, new sources of revenue continue to emerge. Former Republican House Speaker John Boehner (and former opponent of legalization) recently announced that he joined the board of directors for a cannabis company, and sales of cannabis in California are expected to exceed $3.5 billion in 2018 and to surpass the $5 billion mark in 2019. As a result, media outlets stand to gain substantial sums in advertising revenue for all the newly-licensed state legal businesses. But before placing any advertisement, companies need to consider the rarely-used but newly-relevant provision of federal criminal law that addresses advertising.

Although seldom used in federal criminal prosecutions, a provision of the Controlled Substances Act prohibits placing advertisements for marijuana and other Schedule I substances. 21 U.S.C. § 843(c)(1). Specifically, this provision makes it “unlawful for any person to place in any newspaper, magazine, handbill, or other publications, any written advertisement knowing that it has the purpose of seeking or offering illegally to receive, buy, or distribute a Schedule I controlled substance.” 21 U.S.C. § 843(c)(1). So does that mean no one can run advertisements? No, but it means that advertisements need to be approached with caution. Continue Reading

On Monday, President Trump delivered an opioid speech in New Hampshire in which he promised to get tough on opioid investigation and enforcement. This follows on the Department of Justice’s (“DOJ”) prior assertion that it will strengthen its efforts against pharmaceutical industry members.

On February 27, 2018, the DOJ announced the creation of a Prescription Interdiction & Litigation (“PIL”) Task Force.

According to the press release, the PIL Task Force is charged with investigating and bolstering existing claims brought by municipalities, carefully monitoring pharmaceutical manufacturer and distributor compliance, and supporting preexisting strategies to combat the opioid epidemic:

“The PIL Task Force will aggressively deploy and coordinate all available criminal and civil law enforcement tools to reverse the tide of opioid overdoses in the United States, with a particular focus on opioid manufacturers and distributors… The PIL Task Force will include senior officials from the offices of the Attorney General, the Deputy Attorney General, and the Associate Attorney General, as well as senior officials from the Executive Office for U.S. Attorneys, the Civil Division, the Criminal Division, and the Drug Enforcement Administration…The Department will also use all criminal and civil tools at its disposal to hold distributors such as pharmacies, pain management clinics, drug testing facilities, and individual physicians accountable for unlawful actions.”

The Task Force will also create a working group to: (1) improve coordination and data sharing across the federal government to better identify violations of law and patterns of fraud related to the opioid epidemic; (2) evaluate possible changes to the regulatory regime governing opioid distribution; and (3) recommend changes in laws.

On the same day as the PIL Task Force was announced, the DOJ communicated its intention to release a Statement of Interest in the multidistrict opioid litigation hearings headed by various municipalities, occurring in Ohio.

The main thrust of the DOJ’s statement will be that “the federal government – through various federal health programs and law enforcement efforts – has borne substantial costs from the opioid epidemic and seeks reimbursement.”

Keeping You Updated

To keep up to date on this, and other topics related to the Opioid Litigation Epidemic, follow our on-going coverage. For more in-depth updates click here

Ohio Judge Dan A. Polster, who is handling the multi-district opioid litigation proceedings, is taking a very active hand in the management of the proceedings before him, the New York Times reports. His methods are unorthodox: calling for minimal discovery, rapid settlement (if possible), and real-world solutions to “clean up this mess.” Judge Polster’s distinctive personality has already upset some counsel.

Here are some key quotes from Judge Polster’s statements at the first hearing:

“People aren’t interested in depositions, and discovery, and trials. People aren’t interested in figuring out the answer to interesting legal questions like preemption and learned intermediary, or unravelling complicated conspiracy theories.”

“And in my humble opinion, everyone shares some of the responsibility, and no one has done enough to abate it. That includes the manufacturers, the distributors, the pharmacies, the doctors, the federal government and state government, local governments, hospitals, third-party payors, and individuals, hospitals, third-party payors, and individuals. Just about everyone we’ve got on both sides of the equation in this case.”

“But the resolution I’m talking about is really – what I’m interested in doing is not just moving money around, because this is an ongoing crisis. What we’ve got to do is dramatically reduce the number of the pills that are out there and make sure that the pills that are out there are being used properly.”

FDA announced last week that it is permitting marketing of an mHealth app that uses artificial intelligence (AI) to analyze CT images for signs of stroke. The app, called Contact, is a clinical decision support tool marketed by Viz.AI. It relies on triage software to scan for potential blockages and then notifies a medical specialist via smartphone or tablet. The anticipated benefit is that quicker identification of blockages will decrease the time to treatment and improve outcomes.

FDA’s press release provides helpful detail for developers regarding how Viz.AI substantiated the efficacy of its app. “The company submitted a retrospective study of 300 CT images that assessed the independent performance of the image analysis algorithm and notification functionality of the Viz.AI Contact application against the performance of two trained neuro-radiologists for the detection of large vessel blockages in the brain. Real-world evidence was used with a clinical study to demonstrate that the application could notify a neurovascular specialist sooner in cases where a blockage was suspected.”

The pathway to market was also unique. As also noted in the press release, “The Viz.AI Contact application was reviewed through the De Novo premarket review pathway, a regulatory pathway for some new types of medical devices that are low to moderate risk and have no legally marketed predicate device to base a determination of substantial equivalence. This action also creates a new regulatory classification, which means that subsequent computer-aided triage software devices with the same medical imaging intended use may go through the FDA’s premarket notification (510 (k)) process, whereby devices can obtain marketing authorization by demonstrating substantial equivalence to a predicate device.”

Those of us who spend our days at the intersection of law and advertising of health products generally accept that the prescription drug world is a universe unto itself, overseen by the FDA pursuant to the Prescription Drug Marketing Act. As prescription drug companies have increased their direct-to-consumer outreach through social media, native advertising, and health information platforms, questions have arisen as to the role that the NAD might play in regulating these advertisements. For those who are unfamiliar, the NAD is the National Advertising Division of the Better Business Bureau. It is an industry self-regulatory body that is charged with hearing and rendering decisions in advertising disputes, typically among competitors. It is commonly used amongst advertisers of consumer-directed products and services. It is not commonly used amongst prescription drug advertisers and, until recently, many likely assumed that NAD did not have jurisdiction to hear prescription drug advertising challenges.

A relatively recent NAD decision makes clear that that body believes that it has jurisdiction over prescription product advertising, however. Late last year, the NAD evaluated advertising by Synergy Pharmaceuticals for its Trulance product, which is prescribed for chronic idiopathic constipation. Allergan, maker of a competing product, challenged the advertising on the basis that it included false implied superiority claims, expressly false superiority claims, and undisclosed native advertising in the form of a waiting room pamphlet that allegedly was positioned as independent and impartial patient education material. Continue Reading

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ABOUT THE FOOD AND DRUG LAW PRACTICE

Kelley Drye’s food and drug team is experienced in the full spectrum of regulatory and legal risk management issues that food and drug companies must navigate to comply with Food and Drug Administration (FDA), U.S. Department of Agriculture (USDA) and Federal Trade Commission (FTC) requirements, and be successful in the U.S. marketplace. We represent companies throughout product development and marketing, including all premarket clearance requirements for product safety, labeling, advertising and other marketing promotions. We also represent companies in food and drug law matters concerning product manufacturing, distribution, supply chain management and import/export requirements. In addition, our food and drug team represents companies in matters concerning defective products in the U.S. marketplace, including postmarket adverse event reporting obligations, recalls, investigations, warning letters and adverse publicity. We defend companies when the safety, labeling or marketing of their products is challenged in cases brought by the government, competitors, or on behalf of consumers.